BLOG: Is the Government starter home scheme all it seems?

A NEW scheme offering 100,000 first time buyers in the UK new homes with a 20% discount has been announced by the Prime Minister as part of a drive to ‘help people onto the housing market’.

Aspiring homeowners will be asked to register their interest in buying via the Starter Home Initiative from the start of next year, an initiative that has been developed to help what some have dubbed ‘Britain’s housing crisis’.

A large part of the project involves a change to the planning system, ‘freeing under used or unviable brownfield land from planning costs and levies in return for a below market value sale price on the homes built on the site’.

Under section 106 developers are obliged to pay money towards ensuring adequate infrastructure for the community. No S106 liabilities means no responsibility to ensure this happens, the land could be bought and developed without suitable access to transport, education, open spaces and libraries that the payments are intended to fund.

David Cameron rolled out the same rhetoric we have come to expect, saying: “Hardworking young people want to plan for the future and enjoy the security of being able to own their own home’, appearing to overlook the 85,000 homeless people on social housing waiting lists in Manchester alone. There may be a need for ‘affordable starter homes’ but the need for affordable social housing is far more pressing.

The reality is that this scheme is not going to increase housing availability, nor improve affordability. Similar schemes in the past have done little more than transfer lots of taxpayer cash into developers’ pockets without really increasing output or decreasing the costs charged for housing. There is no long-term benefit or gain for society from this scheme, unlike real investment in social housing that sees new homes built, rented at rates people can afford and let to families on a perpetual basis.

Is this really nothing more than Cameron’s idea of trying to ‘buy’ election votes?

When Thatcher sold off council houses in her own bid to do the same it led to the largest shortage of social housing ever, with thousands of homeless paying the price.

The government’s denial of the role of social housing in ensuring our economic needs to be met is both short sighted and self-defeating. The current housing policies are not sustainable, as was shown by the role it played in the economic crash five years ago.

It could be an attempt by the government to delay the UK housing market from collapse. The UK is the highest indebted EU country with an ageing, pension-less population and the younger generation strapped up with increasing student debt, estimated at £44,000 each from 2015. This latest “Starter Home Scheme’ is very similar to other shared ownership schemes - we’ve had ‘buy to rent’, ‘help to buy’, ‘rent to buy’ and now ‘buy for votes’ – short term and perhaps locally they seem like a good idea but from a long term macro economic perspective the raw perspective the raw price goes up to compensate.

We do need an increase in housing stock but I’m not sure this scheme will give us that. If it were really about lowering prices then surely an idea would be to bring down all housing costs by 20%. We don’t need discounted houses, or ‘affordable builds’ – just simply more homes.